Another Trump Tax Break for the Richest Americans

On Monday, we got the latest example of President Trump and his rich buddies’ shamelessness in trying to enrich themselves and their golfing partners with the New York Times report that Trump’s Treasury Department is pondering ramming through a $100 billion tax cut almost exclusively to the very wealthiest in America by overhauling how the capital gains tax is calculated. To make matters even more underhanded, the White House is studying whether it can bypass Congress and make the move by executive fiat by arguing it’s a simple regulatory change rather than a legislative one.

The broad outline of the change is that the new capital gains cut would factor in inflation of any asset being sold, thereby slashing the difference—on paper—between what you bought, say, your house for and what you sold it for. That, in turn, would reduce what you pay in capital gains tax. Here’s a more detailed explanation from the Times:

Currently, capital gains taxes are determined by subtracting the original price of an asset from the price at which it was sold and taxing the difference, usually at 20 percent. If a high earner spent $100,000 on stock in 1980, then sold it for $1 million today, she would owe taxes on $900,000. But if her original purchase price was adjusted for inflation, it would be about $300,000, reducing her taxable “gain” to $700,000. That would save the investor $40,000.

Unsurprisingly, the Times notes, good faith independent analyses of recalibrating the capital gains tax in this manner found that almost all of the money—more than 97 percent of the benefits—would go into the pockets the top 10 percent of income earners, 86 percent would go to the top 1 percent, and nearly nearly-two thirds of that cash would go to the top 0.1 percent. This is a move long-coveted by conservatives and, in Trump, they see their opportunity to claw back money by fiddling with the government definition of “cost” in order to include inflation, rather than the actual amount you paid for your house. It’s a move previous Republican administrations have considered and decided ran afoul of the law.

"Jane Hardy, the chief executive of a company that makes lawn-care equipment, says she had to lay off 75 employees this summer because of President Trump’s trade war. .. Small and mid-size companies are especially vulnerable to the tariffs because they are not able to absorb costs or shift production overseas as easily as larger companies. Hardy feels caught in a bind: If she raises her prices, foreign competitors will undercut her. Instead, she cut almost 40 percent of her 200-person workforce, most of whom are blue-collar production workers at the Brinly-Hardy plant in southern Indiana. It was the same tactic Mid-Continent Nail, the largest U.S. nail manufacturer, used earlier this summer when it laid off dozens of workers in Missouri because of Trump’s tariffs on Mexican steel. Mid-Continent has warned it may have to close its doors by Labor Day. "

"Trump has repeatedly said he would protect American farmers in the trade war, last week setting aside $12 billion to help them, but he is facing pressure to extend aid to other industries if the tariffs remain in place or get extended to more products.

Extending those bailouts would be an expensive proposition. The U.S. Chamber of Commerce on Monday estimated the total price tag could hit $39 billion if Trump compensated the losses across all industries. It would take $7.6 billion to help car and automobile parts manufacturers alone, the Chamber said, calling it a “slippery slope” for Trump to determine who gets help and who doesn’t. The Chamber has been a vocal critic of the tariffs.

Critics of Trump’s trade policy are calling on him to de-escalate the trade war rather than try to bail out the businesses hurt by it. But if the trade fight continues and the midterm elections draw near, the White House stands to face pressure, including from Republicans, to extend more government aid."

"The Treasury Department predicted the U.S. government’s borrowing needs in the second half of this year will jump to the most since last decade’s financial crisis as the nation’s fiscal health deteriorates despite a strong economy.

The department expects to issue $329 billion in net marketable debt from July through September, the fourth-largest total for that quarter on record and higher than the $273 billion estimated in April, Treasury said in a report Monday.

The department’s forecast for the October-December quarter is $440 billion, bringing the second-half borrowing estimate to $769 billion, the highest since $1.1 trillion in July-December 2008.

The estimates were “quite a bit higher than our expectations,” Thomas Simons, senior money-market economist at Jefferies, said in a note.”

Wellness Minute

“Sorry for the inconvenience.” That was written on the card as it stood in front of the empty space on the shelf of the store where I usually shop. My disappointment was real but temporary, or so I thought. Shortages occur after all. But this time it was different.

We all know the scenario. Inflation and a fluid marketplace work their peculiar magic, and soon the item returns in a “new, improved” package, costing more and containing less. Knowing this I was resigned to my fate.

But it didn’t. The item that I had purchased once a week for nearly thirty years simply disappeared, the others closing ranks around it to give the impression that it had never been there. My inquiries to the store were met with a cheery voice on the phone explaining that my traditional purchase no longer fit their corporate plan. It’s not in their “big picture.” The meaning is obvious. Neither am I.

It’s these individual decisions and choices that make our lives our own and watching my preferred items disappear from store shelves is surely a sign of a diminished world, or at least of my place in it. My importance as a customer has run its course. I have slipped out of the viable demographic. Although firmly in the “boomer” generation my tastes are now called into question by a retailer who no longer considers me -and obviously others of similar bent- as important enough to care about. I am offered a substitute more convenient to the master plan of some corporate bureaucrat and told to take it or leave it.

It’s a little like being the unwanted guest at the party. The drink in my hand tastes strange. The music is too loud and unfamiliar. I drift around clusters of strangers, excluded from conversations I can barely hear. I am left to admire the wallpaper and perhaps wander into the kitchen to find a quiet place to sit and reflect.

Well, tastes change. Mine haven’t. Populations shift. Time has shifted me into a higher age bracket. I thought I was standing still, my consciousness blurred by normalcy and contentment, and all the while the earth was being turned beneath my feet.

Holocaust survivor, Elie Weisel wrote that, “The opposite of love is not hate, but indifference.” Indifference, it seems, is the final insult that we all must suffer at the invisible hands of the capitalist state. Reagan said that a rising tide raises all boats. The analogy falls apart when you consider that millions of Americans in the great recession are now flooded out of their homes, jobs, and all hope for a better future by a tide composed of little else but that swelling indifference on the part of the capitalist class.

All right, I admit that I am not the perfect consumer. I’m a poor target for advertising. I don’t stay up late enough for prime time. There are whole TV series -award winning, critically acclaimed, with rabid fans- that I have never seen. I buy little that I don’t actually need. Robin and I normally use our credit cards only for things for which we already have money in the bank. I am probably abnormally content with my life and if I do want something beyond my current reach I do the old fashioned thing -I save for it- and research products exhaustingly before committing hard earned cash.

This makes me unsuited for a capitalist world. I don’t quite belong. How strange it is that those who preach most loudly against collectivism and the submission of the individual to the group are always collectivizing people into generalized groups of “others”, undesirable and otherwise. And yet they have a collective belief in the threat of collectivism. Collectively they say everyone is on their own. Collectively no one should expect anything from anyone else. Collectively it’s every man for himself. Collectively no one owes any one anything. Self-interest is the only virtue that should be common to all and collectively practiced.

There is no such thing as society said Britain’s famous Iron Lady, “ only individuals.” And yet how strange is it that “the individual,” an icon of capitalist thought, should count for so little in the modern capitalist world. To the corporate state we are not people but consumers, customers, faceless faces among the buying public, power cells in the consumerist matrix whose only purpose is to help drive the system. When your purchasing power is suspected to be low you’re discarded. You are collectivized into the ranks of the less important. Is it any wonder then that we have recently heard certain people questioning the right of the poor and those lacking property to vote? Is it any wonder that a corporation should deem it fit that customers accept without question what is offered to them, being part of the consuming masses, a collective of impotence, the favored collective of the political right. Driving the herd this way and that is more profitable than seeking for the lost sheep. What really matters is dividing the herd into manageable proportions.

So, after years of believing myself in an economic partnership I have become a true individual at last, my wants and needs having been sacrificed for the greater good of a corporation, a collective based on a hierarchy of self-interest and profit? By taking away my choice of product I have been given the freedom to make another choice, one more in line with their preferences if not my own, one in fact of their choosing. Isn’t this the kind of freedom that the movers and shakers offer us all? We are free according to their dictates, to choose from the choices they allow us.

Well, I’ll not “occupy” the store, or even the space where late my one true choice once lay. I won’t picket the offenders, but rather do what I’m better suited to. I’ll write them and inform them of my choice to shop elsewhere. That’s a freedom we both will understand.